Coinbase Suspended the Ethereum Classic Withdrawal Due to an Alleged 51% Attack

Cryptocurrency exchanges Coinbase and bitFlyer suspended the deposit and withdrawal of Ethereum Classic (ETC). The reason was a possible attack of 51% on the crypto blockchain. ETC developers deny the attack, claiming it was “selfish mining”.

On Saturday evening, one of the largest cryptocurrency exchanges Coinbase noticed the “deep chain reorganization of the Ethereum Classic blockchain”, which led to double spending of ETC. At first, according to the exchange, there were 8 reorganizations in the blockchain, during which 88,500 ETC, or approximately $460,000, were subjected to double spend. Then the situation worsened, and Coinbase found reorganization of coins worth more than $1.1 million.

According to the exchange, such a situation is possible during the 51% attack, when a group of miners concentrates most of the hashrates in their hands. This allows them to change transaction history and spend cryptocurrency several times.

Crypto exchange bitFlyer also noticed a reorganization. Two trading platforms have temporarily suspended the deposit and withdrawal of Ethereum Classic to secure customers.

The developers of Ethereum Classic said the cryptocurrency was not experienced a 51% attack, as well as a double spending problem. According to them, the growth of hashrates in the system could be explained by testing of new ASICs for mining ETC.